Weng Toa, chief scientific officer at Neurotech USA, holds a container with a new product that is in the development stage. The company is getting financial help from the state for its new manufacturing facility.

The Providence Journal / Steve Szydlowski

Neurotech USA Inc., a biotechnology company in Lincoln that has designed a new method of delivering medicine behind the eye, is building a manufacturing plant in Cumberland.

The company plans to announce its decision today. It says it will move into the new building, in the Highland Corporate Park, by the second quarter of the year.

State economic development officials, still reeling from 300 layoffs at Amgen Inc. last year, say Neurotech’s expansion gives a boost to Rhode Island’s fledging biotechnology sector.

Alexion Pharmaceuticals Inc., based in Cheshire, Conn., has spent nearly $80 million renovating the former Dow Chemical plant in Smithfield, where the company plans to produce the drug Soliris. That project generated 100 jobs. Neurotech is planning to more than triple its work force, from 21 employees to 70, by the end of next year.

In addition to the planned 27,000-square-foot production plant, Neurotech is keeping the 12,000 square feet it leases in the former Cyto Therapeutics building in Lincoln.

“We are making a lot of progress in the biotechnology space,” said Saul Kaplan, executive director of the Rhode Island Economic Development Corporation. “This is a great example of what we mean about creating higher-wage job opportunities.”

Health-care and life-sciences jobs in Rhode Island paid an average salary of about $52,000 in 2006, almost $13,000 higher than the state’s average wage.

The state’s support for Neurotech comes during Governor Carcieri’s efforts to create research-based jobs to replace the thousands of traditional manufacturing positions that have disappeared in recent years.

In 1980, manufacturing jobs made up 38 percent of all private-sector employment in Rhode Island. By 2006, that contribution had dropped to just 13 percent.

To keep Neurotech growing, the Slater Technology Fund, a taxpayer-backed source of venture capital, loaned the company $100,000 in 2000.

For the company’s new project, the state is again intervening. The Rhode Island Industrial Facilities Corporation, part of the EDC, is selling $4 million in bonds to pay for equipment and the installation of two modular “clean rooms” in the new building. A separate EDC program, the Rhode Island Industrial-Recreational Building Authority, is guaranteeing the loan.

Bank of America is lending the money to Neurotech, which is responsible for all principal and interest payments. The company is contributing another $1.6 million for the project on its own.

The building itself will be paid for and owned by the Economic Development Foundation of Rhode Island, a state-chartered nonprofit corporation that has negotiated a seven-year lease with the company.

Still, success is not guaranteed. Neurotech brought in $35 million in venture capital in 2006, but still has no commercial product or revenue. It is spending $10 million a year on research and personnel costs.

But the decision to invest in a manufacturing plant indicates confidence in its discoveries. Neurotech completed a two-year, phase-one clinical trial in 2005, and three later-stage trials are under way. If they produce strong results, the company could file for U.S. Food and Drug Administration approval without further research.

“I call it bio-dice. It’s not an industry for the faint of heart,” Neurotech’s president and chief executive officer, Ted Danse, said. “The lead times are so, so long in this business that if you don’t start years ahead, you’re not ready. There are certain risks associated with it, but we are confident to go ahead with the next steps.”

Relying in part on research from Brown University, Neurotech scientists engineer human retinal cells to produce proteins to treat retinitis pigmentosa and other conditions.

Because the so-called blood-retina barrier stops drops from reaching the back of the eye, Neurotech loads the cells into six-millimeter, hollow capsules that are implanted in the eye. There, the cells continue to produce the medicine, which is released through pores of the capsule.

That type of innovation, said Richard G. Horan, senior managing director of the Slater Fund, “is where the future of biotherapeutics lies.”

Investing in a manufacturing plant before winning FDA approval, Horan said, is typical of companies that have recorded encouraging results from clinical studies.

As in this case, larger space is often needed to meet federal safety guidelines for drug approval. It also allows immediate large-scale production if approval is given, he said.

“When you get products in advanced clinical development, one can make reasonable projections about the possibility of getting approval,” Horan said. “Assuming you get approved, you can make reasonable projections about revenue ramp-up.”

bgedan@projo.com